The fourth quarter also saw a remarkable 107% increase in GAAP net income, which rose to $29 million, reflecting the company's effective cost management and operational efficiencies. The GAAP operating margin stood at 11.5%, while the EBITDA margin was reported at 16.2%, indicating strong profitability. Furthermore, RH generated $55 million in free cash flow during the quarter, underscoring its solid financial health.
Looking ahead, RH provided an optimistic outlook for fiscal year 2026, projecting revenue growth between 4% to 8% and an adjusted EBITDA margin of 14% to 16%. The company also anticipates adjusted free cash flow of $300 million to $400 million, which will support its ongoing expansion efforts, including the opening of new galleries and international markets.
In a video presentation accompanying the earnings release, Gary Friedman, RH's Chairman and CEO, highlighted the company's strategic initiatives aimed at enhancing customer experience and expanding its market presence. He emphasized the importance of innovation and design in driving growth and maintaining RH's competitive edge in the luxury lifestyle market.
Overall, RH's strong financial results and positive outlook reflect its resilience and ability to navigate challenges while capitalizing on growth opportunities in the luxury home furnishings sector.
